Bills Digest no. 68 2009–10

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

Executive Summary

This Bills Digest brings attention to the key aspects of the
Bill and provides technical detail on the provisions. Due to the
length of the Bill, it is not possible in this Bills Digest to
provide detailed analysis of every issue.

The Standing Committee of Attorneys-General (SCAG) agreed to
measures to support a national response to combat serious and
organised crime at its meetings in April and August 2009. This Bill
implements those measures and builds on legislative measures
introduced in the Crimes Legislation Amendment (Serious and
Organised Crime) Bill 2009.

The Bill focuses on changes to procedures by addressing many
concerns of law enforcement authorities that are necessary to
correct anomalies and uncertainties in aspects of criminal
law.

The Bill implements recommendations from a number of reviews:

Independent Review of the Operation of the Proceeds of
Crime Act 2002[1] ( Sherman Report )

Schedules, 2,
3, 4, 5 (Part 2), 7, 8 and 9 commence on
the day after Royal Assent.

Schedules 6,
items 1 and 2 commence on the later of the day after Royal
Assent and immediately after the commencement of subsection 369(4)
of the Criminal Procedure Act 2009 of Victoria. Further,
Schedule 6, item 3 commences immediately after the
commencement of the same Victorian Act.

Schedules 10
and 11 commence on the later of the day after Royal Assent
and immediately after the commencement of Part 1 of Schedule 4 to
the Crimes Legislation Amendment (Serious and Organised Crime)
Act 2009.

The lengthy Bill will serve a number of purposes. Overall, the
Bill is facilitating the operation of the Crimes Legislation
Amendment (Serious and Organised Crime) Bill 2009 which makes some
significant changes to laws relating to proceeds of crime,
cross-border investigations and the introduction of a new joint
commission offence. This Bill will also introduce new offences for
criminal association and committing crimes for a criminal
organisation. The Explanatory Memorandum states that:

the Bill implements legislative aspects of the
national response to organised crime that were not implemented by
the first Bill, and includes additional measures to strengthen
existing laws to more effectively prevent, investigate and
prosecute organised crime activity.[4]

Schedule 1 will amend the Proceeds of Crime Act 2002 to
strengthen the Commonwealth criminal assets confiscation regime.
Many of the provisions in this Schedule are intended to address
inefficiencies and anomalies that have been revealed during six
years of operation of the Act.

Schedule 2 will make reforms to the search warrant provisions in
the Crimes Act 1914 to allow certain seized material to be
shared between law enforcement agencies. The amendments will also
facilitate more effective and efficient access and searching of
electronic equipment.

Schedule 3 will amend the Witness Protection Act 1994,
implementing recommendations made in the Review of the National
Witness Protection Program of December 2003. The amendments
will broaden the protection, security and assistance that will be
available.

Schedule 4 will insert new offences targeting persons involved
in serious and organised crime into the Criminal Code Act
1995.

Schedule 5 will make amendments to address problems encountered
by law enforcement authorities when investigating and prosecuting
the money laundering offences in Division 400 of the Criminal Code.
The amendments will extend the geographical jurisdiction of the
offences and remove limitations on the scope of the offences to
enable them to apply to the full extent of the Commonwealth s
constitutional power in this area.

Schedule 6 will make an amendment
relating to fitness to plead to allow defendants in Victoria to
appeal a finding that they are unfit to plead. The Government
considers this an urgent amendment.

Schedule 7 will amend the Australian Crime Commission Act
2002 to give the Australian Crime Commission (ACC) greater
powers to deal with uncooperative witness. The amendments will
require the ACC to be regularly reviewed (every five years) by an
independent person or body.

Schedule 8 will change the penalties in the Criminal Code for
the offences of bribing a foreign official and bribery of a
Commonwealth public official.

Schedule 9 will make amendments that will have the effect of
broadening the range of criminal activity relating to drug
importation.

The purpose of Schedules 10 and 11 is to make minor and
consequential amendments. These will ensure that references to the
extensions of criminal responsibility provisions in part 2.4 of the
Criminal Code are correct and that references to repealed
provisions of the Crimes Act 1914 are removed.

The Bill is building on reforms proposed in the Crimes
Legislation Amendment (Serious and Organised Crime) Bill 2009. That
Bill was introduced in June 2009 and the Bills Digest can be found
at http://www.aph.gov.au/library/pubs/bd/2009-10/10bd031.htm.
Both Bills are in response to the Standing Committee of
Attorneys-General agreement to support a national response to
combat serious and organised crime.[5]

The second reading speech for this Bill states that the Bill
builds on earlier reforms and further strengthens the laws
necessary to combat organised crime .[6]

In addition, the Bill implements a recommendation from the
Independent Review of the Australian Crime Commission Act
2002, conducted by Mr Mark Trowell QC in 2007.

The second reading speech concludes that the Bill
represents:

another significant step as part of a
coordinated national effort to more effectively prevent,
investigate and prosecute organised crime activities, and to
improve laws that target the proceeds of organised crime
groups.[7]

The Bill was referred to the Senate Legal and Constitutional
Affairs Legislation Committee for inquiry and the Committee
reported on 16 November 2009. Details of the inquiry, including the
link to the Committee s report, are at:

Proposed section 390.3 of the Criminal Code be amended by
limiting its application to circumstance where the accused intended
that the association would facilitate the criminal conduct or
proposed criminal conduct.

The defence in proposed subsection 390.3(6) of the Criminal
Code be amended by:

replacing the existing defences for legal practitioners with a
more general defence that the association was only for the purpose
of providing legal advice or representation and

adding a general defence where the association was reasonable
in the circumstances.

Proposed paragraph 390.4(1)(b) of the Criminal Code be amended
to provide that the person intended the provision of the support or
resources would aid the organisation to engage in conduct
constituting an offence against any law.

That the maximum penalty for an offence under proposed section
390.4 of the Criminal Code should be the maximum penalty for the
offence the accused intended to support.

That subsections 3K(3A) and 3K(3B) of the Crimes Act should
provide for equipment to be moved for examination for an initial
period of no longer than seven days.

That subsection 3L(1) of the Crimes Act should require that,
before operating electronic equipment at warrant premises to access
data, an officer executing the warrant must have reasonable grounds
to suspect that the data constitutes evidential material.[8]

Subject to these recommendations, the Committee broadly
supported the passage of the Bill. Liberal Senators did make some
additional comments about the Bill more generally:

It is not sufficient justification for a
continual expansion in the powers available to law enforcement
agencies and the reach of criminal offences to point simply to the
difficulties allegedly faced in pursuing particular groups of
offenders. The task of law enforcement officers and prosecutors may
well be challenging, but to address this by diluting basic criminal
justice principles, and oversimplifying the arrest, prosecution and
imprisonment of people would jeopardies the most fundamental
individual rights.

Liberal Senators consider that changes proposed
by the Bill and the Crimes Legislation Amendment (Serious and
Organised Crime) Bill 2009 ought to be viewed as being at the outer
limit of the powers the Parliament will countenance for law
enforcement agencies. Furthermore, we intend to monitor closely
through the Estimates process whether these powers are being
exercised appropriately and whether practice bears out arguments
that they are necessary to tackle organised crime.[9]

All amendments made under this Schedule are to the Proceeds
of Crime Act 2002. The amendments are extensive but are mostly
procedural and technical. The amendments are strongly supported by
the Commonwealth Director of Public Prosecutions (DPP) and the
Australian Federal Police (AFP) and many are implementing
recommendations from an independent review of the Act conducted in
2006. The amendments will clarify the operation of certain parts of
the Act to improve the speed in which property can be dealt with.
There are appropriate safeguards in the Bill, and in existing
legislation, to ensure that any person whose property is wrongfully
affected by any court action can be appropriately compensated.

Items 1-15 make changes to various terms in
sections 29 and 29A of the Act.

Item 16 repeals existing subsection 31(1) and
inserts new subsections 31(1) and (1A). A person
will be allowed under these subsections to apply for an exclusion
order over property that they have an interest in that is subject
to a restraining order. An application may be made to the court at
any time after the restraining order is made.

Item 17 implements recommendation D5 of the
Sherman Report, inserting a new sentence into subsection 31(6)
which clarifies that the DPP does not need to give notice of the
grounds on which it proposes to contest an application until it has
had a reasonable opportunity to conduct examinations in relation to
the restraining order.

Item 22 introduces new paragraphs
73(1)(c) and (d) in relation to excluding
certain property from a forfeiture order. This item will ensure
consistency in the test that applies to a person (suspect and third
parties) for an exclusion order.

Items 23 and 24 remove the
term property from paragraphs 73(2)(a),(b),(c) and (d) and
substitutes them for the term interest . Similarly, item
25 amends subsection 74(1) to omit the reference to the
person s property and replace it with property in which the person
claims an interest .

Item 26 inserts new provisions on the timing of
when a person can apply for an exclusion order following a
forfeiture order. The provisions are necessary for consistency
between the application provisions for exclusion of property from a
restraining order (section 31) and exclusion of property from a
forfeiture order. The Explanatory Memorandum states that

the aim of this amendment is to encourage
people to make an application for property to be excluded prior to
forfeiture of property. This will assist in the timely
administration of the Act, as a court can consider an application
to exclude property within the context of the forfeiture
proceedings.[11]

Item 27 is consequential to the amendments made
to section 76 by item 28. Item 28
implements recommendation D6 of the Sherman Report, allowing the
DPP to examine any person that may have information relevant to an
application for an exclusion order, prior to the application being
heard by a court.

Items 29 and 30 repeal the existing heading and
subsection 77(1) and substitute it with new paragraphs
77(1)(a)-(e). The Subdivision containing the new
subsection addresses compensation for the proportion of property
not derived or realised from the commission of any offence. An
example is provided in the Explanatory Memorandum where the deposit
for a house is derived illegitimately while the bank loan is
lawfully commenced. New subsection 77(1) will
require a court to be satisfied that the portion of the applicant s
interest that is to be compensated was not derived or realised,
directly or indirectly, from the commission of any offence and is
not an instrument of any offence.[12]

Item 31 will insert new words into paragraph
77(2)(b) that clarify that the Commonwealth is not required to
carry out the directions specified by the court under paragraph
77(2)(b) until the property vests absolutely in the
Commonwealth.

Item 32 will repeal existing section 78 and
substitute it with new section 78 concerning
applications for compensation orders. Under new subsection
78(1), a person may apply to a court for a compensation
order if an application for a forfeiture order has been made to the
court, but the forfeiture order is yet to be made. New
subsection 78(2) deals with compensation applications post
forfeiture order. New subsection 78(3) prevents
the applications if the person was notified of the application for
the forfeiture order but did not make an application under
subsection (1) before the forfeiture order was made; or appeared at
the hearing of the forfeiture. The court may give the person leave
to apply if there was a good reason, there is new relevant evidence
or there are other special grounds for granting the leave
(new subsection 78(4)). The Explanatory Memorandum
states that the:

aim of these amendments is to encourage people
to make an application for property to be compensated, prior to the
forfeiture of property. This will assist in the timely
administration of the Act, as a court can consider an application
for compensation within the context of the forfeiture
proceedings.[13]

Item 33 will allow the DPP not to give notice
of the reasons that it proposes to contest an application for
compensation until it has had a reasonable opportunity to conduct
examinations in relation to the application. This is a
consequential amendment (item 103).

New section 79A will state that an application
for a compensation order must not be heard until the DPP has had a
reasonable opportunity to conduct examinations in relation to the
application (item 34).

Item 35 relates to the application of the
amendments, which will be determined by reference to either the
date of the application for a restraining order, or the date of
application for a forfeiture order.

Item 40 inserts a new subsection
92A(1) which requires the DPP to take reasonable steps to
give any person who has or claims [to have], or whom the DPP
reasonably believes may have, an interest in the property a written
notice. The terms of that notice are identified in the section.
Further, new subsection 92A(2) says that the DPP
need not give a notice to a person under subsection (1) if the
person has made an application for an extension order in relation
to the property; and an application under sections 30, 31, or 94 in
relation to the property. The purpose of new section
92A, as noted in the Explanatory Memorandum, is to ensure
that a person who may have an interest in property will be given
notice of the automatic forfeiture and their associated rights in
relation to that property.[14] Currently there is no requirement that a defendant or
any other person be notified of the potential for automatic
forfeiture.

Item 41 makes a consequential amendment to
paragraph 93(1)(a). The amendment is consequential on item
66 which amends the definition of conviction day in
paragraph 333(1)(a). Item 44 makes the same
consequential amendment to subsection 93(1).

Items 42 and 43 implement recommendation D14 of
the Sherman Report by making technical amendments to section 93 of
the Act. The items amend section 93 to provide that a court may
also extend the time period before property is forfeited if a
person has applied for property to be excluded under sections 30,
31 and 94. As the provisions are currently drafted, the DPP is of
the view that section 93 fails to recognise that an application for
exclusion of property from automatic forfeiture may also be made
under section 94 and sections 30 and 31.[15]Items 45, 46 and 47
make consequential amendments to these provisions.

Item 48 inserts a new notice provision for when
an order extending the forfeiture date is made under section 93.
New paragraphs 93(4)(a) and (b)
outline what must be included in the contents of the notice.

Item 50 makes a minor amendment to subsection
94(1) to bring greater consistency to the provisions of the Act.
This amendment aligns the requirement for a court to exclude
property from forfeiture, with the requirement for the court to
exclude property from a restraining order and a forfeiture order
under section 29.

Item 51 repeals paragraphs 94(1)(a), (b) and
(c) and inserts two new paragraphs. The amendment will correct an
anomaly in existing section 94. The amendment will require a court
to exclude property from forfeiture where it is satisfied that a
person has an interest in property covered by a restraining order
that the interest is not proceeds of lawful activity or an
instrument of unlawful activity, and that the interest has been
lawfully acquired. Items 52 and
54 will make consequential amendments to
item 51.

Item 53 makes a minor amendment to existing
paragraph 94(1)(e) to bring more uniformity in the terminology used
in the Act.

Item 55 makes an amendment that will clarify,
in subsection 94(5), that the DPP does not need to
give notice of the grounds on which it proposes to contest an
application until it has had a reasonable opportunity to conduct
examinations in relation to the restraining order.

Item 56 will insert new subsection
94(6) which will provide that an application for an
exclusion order must not be heard until the DPP has had a
reasonable opportunity to conduct examinations in relation to an
application . This amendment will ensure the DPP has an opportunity
to explore whether the relevant property has any links to proceeds
of crime, prior to a court considering whether to exclude that
property from forfeiture.[16]

Item 57 inserts new section
94A which will allow compensation to be granted where
property has been forfeited under section 92 of the Act. The court
must be satisfied that the person has an interest in the property
and that a proportion of the value of their interest was not
derived or realised from the commission of any offence (and is not
an instrument of any offence).

Item 58 is a consequential amendment to the
repeal of subsections 102(2) and (3). Item 59
makes a small amendment (omitting may and inserting must into
existing subsection 102(1)) which has the consequence of aligning
the court s requirements to make certain orders (under sections 29,
73, 94).

Item 60 will align the test for recovery of
property under section 102 with the test for exclusion of property
under section 94. The Explanatory Memorandum says that:

The test for exclusion of property could be
viewed as more difficult to prove than the test for recovery of
property, as it contains an additional requirement that the court
must be satisfied that the applicant s interest in property was
lawfully acquired.[17]

The item will correct the anomaly in existing paragraph
102(b) by requiring the court to be satisfied that the
applicant had an interest in the forfeited property and that the
interest was not the proceeds or instrument of unlawful
activity.

Item 63 introduces amendments to the
application provision under section 104 and seeks to align the
provisions with similar provisions under sections 31, 74, 78 and
94A:

The aim of these amendments is to encourage
people to make an application for exclusion of property prior to
forfeiture of property, rather than waiting until after
forfeiture.[18]

Proposed new section 104 will allow a person
who claims an interest in property that has been forfeited to the
Commonwealth under section 92 to apply to the court that made the
restraining order (paragraph 92(1)(b)) for an order under section
102 or 103. However, restrictions are imposed on the person under
proposed paragraphs 104(2)(a) and
(b).

Items 65 and 67 are
application provisions that have retrospective application.[19] Those items note that
Part 2-3 and paragraph 333(1)(a) of the Act will apply whether
conduct constituting the offence concerned occurred or occurs
before, on or after commencement.

The amendment to subparagraph 121(4)(a)(i) under item
68 will ensure the court takes into consideration the full
range of criminal benefits a person has gained. The item amends
subparagraph 121(4)(a)(i) to insert a reference to property being
subject to the effective control of a person (more than just
property covered by a restraining order).

Items 69 and 70 will amend
paragraphs 122(1)(a) and 122(1)(b) by removing the references to a
person s request or control.

The amendments will remove the requirement for the DPP to prove
that the defendant impliedly requested or directed that money or a
benefit went to a third party (including a company). The
Explanatory Memorandum notes that this is contrary to the intention
of the Act.[20]

As noted in the Explanatory Memorandum, these items implement
recommendation D17 of the Sherman report. The DPP s justification
of the proposal suggests that the amendments would put it beyond
doubt and potentially save considerable court time.

Item 71 corrects a drafting error by inserting
the phrase and the other unlawful activity into existing
paragraph 124(1)(c). Section 124 deals with the
calculation of pecuniary penalty orders. Similarly, item
72 amends existing paragraph 124(5)(a) to
add a reference to property being subject to the effective control
of a person. This will facilitate the court having regard to all
the benefits a person has derived when calculating a pecuniary
penalty order.

The intention of items 73 and
74 is to ensure that the formula for calculating
pecuniary penalty orders does not result in a person being required
to account for criminal benefits twice .[21] The amendments will insert references
to unlawful activity in existing section 130 to correct a drafting
error.

Items 75 and 76 will amend
section 133 relating to the ability to vary a pecuniary penalty
order, and implement recommendation D19 of the Sherman Report. That
recommendation said that section 133 should be amended to ensure
that the value of pecuniary penalty orders can be adjusted where
exclusion, compensation or recovery orders are subsequently
made.

Item 77 explicitly notes that Division 2 of
Part 2-4 of the Act (Determining penalty amounts for pecuniary
penalty orders), applies in relation to pecuniary penalty orders
that are applied for on or after the commencement of this item,
whether conduct constituting the offence concerned occurred or
occurs before, on or after that commencement.

Item 78 will remove the time limit for an
application for a pecuniary penalty order, if it is in the
interests of justice to do so.

Items 79 and 80 will amend
subsections 136(2), (3) and (4) to implement recommendation D20 of
the Sherman Report. The amendments will require the DPP to provide
a defendant with any affidavit that will be relied upon in a
pecuniary penalty order hearing, within a reasonable time before
the court conducts a hearing.

Items 82, 83, 84, and 85 implement
recommendation D21 of the Sherman Report by amending section 146 to
allow a court to vary a pecuniary penalty order where the order was
made on the basis of a number of convictions and one conviction was
subsequently quashed. If a conviction is quashed, a pecuniary
penalty is discharged unless the DPP applies to the court within 14
days to have the pecuniary order confirmed or varied (see
item 91 for variation).

Items 86 and 87 are
consequential amendments arising from the introduction of
new section 149A (item 91).

Item 91 will insert new section
149A, enabling a court to vary a pecuniary penalty order.
The court may vary a pecuniary penalty order by reducing the
penalty amount if it is satisfied that it related to more than one
offence, and one or more of those offences has not been quashed.
The court may have regard to transcripts and evidence given in
proceedings to assist in its decision.

The remaining items in this Part make necessary minor amendments
to facilitate the preceding amendments.

The provisions in Part 3 of the Bill implement some of the
technical recommendations in the Sherman Report (namely 22, 24 and
25) and primarily facilitate the commencement of examination
orders. The court will be able to make an examination order where a
restraining order is not in place when:

An application is made to have property excluded from a
forfeiture order

An application is made for compensation for the proportion of
property that did not involve proceeds of an offence, after the
property has been forfeited

An application is made to recover the interest in forfeited
property that is neither the proceeds of unlawful activity nor an
instrument of unlawful activity, and

A confiscation order has been made but not satisfied.

A thorough and unambiguous description of
new sections 180A-180E can be found at pages 32-35
of the Explanatory Memorandum.

Items 104-108 make amendments to
the Act relating to the application of new sections
180A180E and consequential amendments
relating to the insertion of new terms in the Dictionary (section
338). Item 109 will insert a new
subsection 182(2) requiring the court to consider an
application for an examination order without notice having been
given to any person if the DPP requests the court to do so (an
ex parte application). The Explanatory Memorandum notes
that this item implements recommendation D22(d) of the Sherman
Report which noted the need to examine persons as soon as possible
after restraining orders are obtained in order to preserve property
and progress confiscation proceedings.[22] It is intended that this amendment
will:

reduce court burden and assist authorised
examiners to conduct examinations early to ensure that all relevant
property is identified quickly, and, if appropriate, restrained
early in an investigation.[23]

Item 111 inserts new circumstances (into
paragraph 187(4)(a)) when an examination must not
relate to a person s affairs. If the person is no longer a person
whose affairs can be subject to examination under the new section
created by this part, the examination must not relate to a person s
affairs. See further at item 118, definition of
affairs.

Item 114 increases the penalty for the offence
of failing to attend an examination. The penalty will be increased
to two years imprisonment and/or 120 penalty units.[24] This amendment is
implementing recommendation D24 of the Sherman Report and is
consistent with similar provisions in the Australian Securities
and Investments Commission Act 2001.

Item 116 will insert a new offence of giving
false or misleading answers or documents at an examination. A
person commits the offence if they attend an examination and give
an answer or produce a document and the answer or document is
either false or misleading or omits a matter or thing, without
which the answer or document is false or misleading. This new
offence implements recommendation D25 of the Sherman Report. While
there are similar and general provisions in the Criminal Code
1995, the Government considers that the Proceeds of Crime
Act 2002 should be consistent with the Australian Security
and Investments Commission Act 2001 to address the particular
circumstance of an examination order.[25]

Item 118 inserts a new definition of affairs in
the Dictionary (section 338). The Explanatory Memorandum explains
that this item was necessary as a consequence of two judgements in
New South Wales and Queensland that had different interpretation of
the term. Affairs is to be defined as including, but not limited
to, the nature and location of the person s property and any of the
person s activities that are or may be relevant to whether or not
the person has engaged in unlawful activity of a kind relevant to
the making of an order under the Act.

produce one or more *property‑tracking
documents to an *authorised officer; or

make one or more property‑tracking documents available to
an authorised officer for inspection.

The section also has a lengthy definition of property-tracking
document and item 120 will insert a new paragraph
into subsection 202(5) to ensure that a document relevant to
identifying, locating or quantifying property suspected of being
proceeds of an indictable offence, foreign indictable offence or
indictable offence of Commonwealth concern, or an instrument of a
serious offence, is included in the definition of property-tracking
document . Items 121-124 are consequential to this
amendment.

Item 125 will allow for a document produced
under a production order to be received electronically. This
amendment is intended to facilitate efficient procedures,
especially when dealing with large documents.

Item 127 will insert a defence to an offence
under section 211 for failing to comply with a production order. If
a person took all reasonable steps to comply with a production
order but could not produce it within the specified time, this
defence may be used.

Items 129-131 are consequential amendments
relating to the new definition of account which has been inserted
by item 147.

Item 132 enables authorised officers to obtain
information about stored value cards to assist in identifying
proceeds of crime and ensuring funds are not dispersed.

Item 133 implements one of the major
recommendations of the Sherman Report to allow the Commissioner of
Taxation, the CEO of Customs and the Chairperson of ASIC as
officers who may give a notice to a financial institution. This is
to overcome delays and will not give those authorised
officers the power to issue a notice.

Item 136 will require that the information be
provided in less than 14 days if the authorised officer believes
that is appropriate (having regard to matters in new
subsection 214(2) at item 137). Those
matters in item 137 include having regard to the urgency of the
situation and having regard to any hardship that may be caused by
the reduced time frame.

Item 139 will provide a defence to the offence
under section 218 of failing to comply with a notice given under
section 213. If a person is genuinely unable to provide the
required information within the specific time, they will not be
exposed to a penalty.

Item 141 will insert new subsection
219(1) to allow a judge to make a monitoring order that
financial institutions provide certain information (including the
use of a stored value card).

Items 142-145 are consequential amendments
arising out of the introduction of the new term stored value card
.

Items 147 and 148 insert new
definitions in the Dictionary (section 338) of account (modelled on
the Anti-Money Laundering and Counter-Terrorism Financing Act
2006) and stored value card .

Part 5 will make a number of amendments implementing
recommendation D7 of the Sherman Review.

Ancillary orders are orders which give the restraining order
practical effect, or which help to achieve or promote the
underlying purpose of the restraining order .[26]

Recommendation D7 of the Sherman Report considered that section
39 of the Act should be amended to provide for further ancillary
orders, namely to:

Order a previous owner of the property to provide a sworn
statement on dealing in the property; (note that item
152 goes beyond this by applying it to any other person
(excluding the previous owner) whom the court reasonably suspects
to have information relevant to identifying, locating or
quantifying the property);

Compel a suspect to provide a sworn statement regarding assets
and liabilities;

Require the person in effective control of the property to do
all that is necessary to bring the property within
jurisdiction;

Allow ancillary orders to be made ex parte; and to
make provision to qualify the privilege against self-incrimination
but provide direct use immunity for any statement made.[27] This means that the
evidence can not be used except in proceedings directly related to
proceeds of crime applications or in proceedings for perjury.

The Explanatory Memorandum provides a thorough
overview of the background and intention of these
provisions.[28]

Items 159, 160, 162 and 163
will amend subsection 64(2), paragraph 64(2)(a), subsection 138(2)
and paragraphs 138(2)(a) respectively to remove the references to
conviction of an indictable offence (limiting the existing
provisions) and permit the court to have regard to transcripts of
any proceedings for an offence that constitutes unlawful
activity.

Item 165 will insert a new provision, 318A,
allowing examination statements to be admissible as evidence in
proceedings under the Act. This will only apply in certain
circumstances such as when the person is absent, unavailable or
deceased.

Part 7 makes amendments to the Act addressing consistency and
accuracy in definitions that have come to light through 7 years of
the operation of the Act. The amendments to the definitions are
comprehensively explained in the Explanatory Memorandum.[29]

The amendments do include a repeal of subsection 337A(3)
(item 174)which stated that an offence against a
law of a foreign country included an offence triable by a miliary
commission of the United States of America established under a
Military Order of 13 November 2001 made by the President of the
United States of America. Given the United States Supreme Court
decision in Hamdan v Rumsfeld (29 June 2006) finding the
military commissions to be invalid, it is appropriate to remove
this reference.

When a new trial has been ordered, item 183
will allow a restraining order to remain in effect after a
successful appeal against conviction.

The Explanatory Memorandum addresses unintended consequences in
parts of the Act that deal with forfeiture orders.[30]Items 188 and
189 make consequential amendments arising from the
insertion of subsection 84(1) (item 185).

Item 195 will amend subsection 316(1) to
require the court to seek the consent of all persons likely to be
affected by an order when considering making orders by consent, not
the people who have an interest in the property. This item will
omit from paragraph 316(1)(b) the words has an interest in the
property that is the subject of the proceeding and substituting
would be affected by the order . There is a minor referencing error
in the Explanatory Memorandum to this item.[31]

Item 196 will correct an anomaly in the Act
that was recommended by the Sherman Report (Recommendation
D29).

The amendments to the terminology used for the management of the
Confiscated Assets Account will remove an administrative burden
faced by the Insolvency and Trustee Service of Australia (ITSA).
Prior to these amendments, there was a distinction between
distributable and suspended funds in Part 4-3 of the Act. Supported
by the Sherman Report, ITSA submitted that the process of
determining suspended and distributable funds is becoming less
relevant . The Sherman Report agreed and said that the distinction
seemed to serve no purpose that ordinary prudent accounting
measures cannot serve. [32]

Items 1 and 2 are consequential amendments to
new sections (inserted by items 9 and
10).

Item 3 repeals subsection 3F(5) which is no
longer necessary as a consequence of the insertion made by
item 9. Item 4 will repeal and
replace paragraph 3L(1B)(b), and instead require data to be
destroyed if the Commissioner of the AFP is satisfied that the data
is not required, or not longer required for the investigation of an
offence or complaint, for judicial or administrative review
proceedings or for AFP conduct issues. Items 5-8
will repeal subsections 3UF(4)-(7) and (9) and section 3UG
respectively which will be replaced by new sections
3ZQZA and 3ZQZB (item 9).

Item 9 inserts the new sections allowing for
the use and sharing of seized things (new section
3ZQU) and for the seizure and use of seized electronic
equipment (new section 3ZQV and 3ZQW). The
Explanatory Memorandum outlines the background and detail to the
provisions thoroughly and explains that the provisions do not
presuppose that these uses are not available currently, but puts
the issue beyond doubt by providing a direct legislative basis for
certain uses.[34]
Refer to pages 67-80 for a comprehensive description of the
provisions.

Item 12 will repeal existing subparagraph
3K(2)(a)(ii) and substitute it with the executing officer or
constable assisting suspects on reasonable grounds that
the thing contains or constitutes evidential material [author
emphasis]. The Explanatory Memorandum says that the reasoning for
this is that requiring an executing officer or constable assisting
to determine that there are reasonable grounds to believe
that the thing contains or constitutes evidential material is both
conceptually and operationally problematic. [35]

Further:

The test of reasonable grounds to believe is
the same test that the executing officer or constable assisting
must apply in determining whether to seize a thing that is not
specified in the warrant under paragraph 3F(1)(d). If an executing
officer or constable assisting genuinely holds reasonable grounds
to believe that the thing is evidential material, then it is
questionable why they would elect to move the thing for
further analysis under section 3K when they would already have
grounds to seize the thing under section 3F.[36]

A further insertion to section 3K is made by item
13. This item will insert new paragraph
3K(3)(3AA) that will allow an officer not to comply with
paragraph 3K(3)(a) or (b) if he or she believes on reasonable
grounds that to comply might endanger a person s safety or
prejudice and investigation or prosecution.

The Senate Committee recommended that subsection 3K(3A) and
3K(3B) of the Crimes Act should provide for equipment to be moved
for examination for an initial period of no longer than seven
days.[37] This will
likely be an issue for consideration during debate in the
Senate.

Item 16 will repeal the existing subsection
3L(1) and insert new subsection 3L(1) allowing the
executing officer or a constable assisting to operate equipment
held at the warrant premises to access data (including data not
held at the premises).

Life in witness protection has been described
by one state authority as extremely stressful . That s an
understatement. Yet every year in Australia dozens of people agree
to risk their lives to testify in court in return for shedding
their previous lives like old skins and making a new start. For
most, it is the only option other than death or physical
injury.[38]

The National Witness Protection Program (NWPP) was established
under the Witness Protection Act 1994 (Cth) (the WP Act)
following recommendations of the Joint Parliamentary Committee on
the National Crime Authority in 1988. The WP Act created the NWPP
and gave the Commissioner of the AFP responsibility for running the
program.

In deciding whether to include a witness in the NWPP, the
Commissioner must consider:

Whether the witness has a criminal record and whether that
record indicates a risk to the public if the witness in
included

Whether there are any viable alternative methods of protecting
the witness

Any psychological or psychiatric examination which has been
conducted to determine the witness suitability for inclusion.

In the financial year ending 30 June 2006, the
NWPP managed 19 active witness protection operations, providing
protection to 39 people. According to the AFP, the majority of
people have been accepted into the program because of their
involvement as witnesses in prosecutions relating to organised,
large-scale importation of illegal drugs, or corruption matters.
The movement of witnesses into or out of Australia remains an
active element of the NWPP .[39] In the previous year s Annual Report the
following information was provided:

The NWPP provided protection and assistance to
51 people during the reporting period.

In addition, three people were assessed for
inclusion in the NWPP during the period; two applications met the
necessary criteria and one application did not. Five additional
inquiries were received, however they did not progress to
assessment.[40]

The latest Annual Report (September 2006-07) does not provide
any statistics in this part of the Report, Performance and
effectiveness of the NWPP .

As noted above, the WP Act allows for the inclusion of foreign
nationals in the NWPP but whether criminals, murderers and
terrorists have been allowed into Australian under the program is
not divulged by the authorities.[41] Each Annual Report on the NWPP states that:

Details of the actual movement of witnesses
into or out of Australia or arrangements entered into between
Australia and other Governments cannot be reported without the
possibility of compromising either the safety of individuals
concerned or the integrity of the NWPP.[42]

The Attorney-General notes in his second reading speech that the
amendments will increase protection of current and former
participants and officers involved in the program, [43] and the Explanatory
Memorandum outlines the key changes:

Clarifying the application of the Act to witnesses involved in
State and Territory matters

Updating the concept of identity

Extending the availability of protection under the NWPP to
former participants and related persons

The most significant amendments to the WP Act are to add
additional definitions to section 3 and to expand the existing
offences.

Items 2, 3 and 7 insert
definitions of current, former and original identity and
items 4 and 8 insert a definition
for a former participant and participant respectively. A
participant is extended to include a former participant unless
otherwise stated. In relation to identity, currently the WP Act
only distinguishes between a person s former identity and their new
identity . The Explanatory Memorandum explains:

Such a distinction is based on the assumption
that a person will only be provided with one identity under the
NWPP, and that their former identity is equivalent to their
original identity. However, while they would only ever be using one
identity at a particular point of time, NWPP participants may be
provided with more that one identity in addition to their original
identity. This can happen if the first identity provided to the
person under the NWPP is compromised in some way. [45]

Section 13 provides what actions can be taken to protect a
witness who has been included in the NWPP. Item 22
adds new subsection 13(5) to include a former
participant, or any other person whose relationship with the former
participant that the Commissioner considers appropriate, in need of
protection. Item 37 inserts new subsection
18(2A) which will allow the Commissioner to terminate that
protection and assistance in certain circumstances, for example, if
the person had given false and misleading information, or the
person s conduct could jeopardise the integrity of the NWPP
(new paragraphs 18(2A)(b)(i) and (ii).)

Items 10 and 11 also insert
definitions of State participant and Territory participant into
section 3 of the WP Act to mean a participant in relation to an
offence, commission or inquiry against a law of a State or
Territory, or in relation to a State offence that does or does not
have a federal aspect . A State offence that has a federal aspect
is defined in new section 3AB to mean offences
that would be taken to be such under the Australian Federal
Police Act 1979 (the AFP Act) and the Australian Crime
Commission Act 2002.

Essentially, a State offence has a
federal aspect if the provision creating the offence would have
been a valid law if it had been made by the Commonwealth, or if the
AFP is investigating a criminal matter relating to a Commonwealth
or Territory offence. According to the definition contained in AFP
Act, it is irrelevant whether the State offence is an ancillary or
primary offence. The term ancillary offence is defined as
conspiracy to commit the primary offence; aiding, abetting or
otherwise being knowingly concerned with the commission of the
primary offence; and attempting to commit the primary
offence.[46]

Item 52 repeals the current offence provision,
section 22, and inserts new sections 22, 22A, 22B
and 22C. The offences relate to Commonwealth or
Territory participants, about State participants and about
disclosure of information. New section 22C
provides that the non-disclosure requirements extend to courts,
tribunals, Royal Commissions and commissions of inquiry.

Schedule 4 will insert new Part 9.9,
new sections 390.1- 390.7 into the Criminal Code. The new
offences being created are:

associating in support of serious and organised criminal
activity (new section 390.3)

supporting a criminal organisation (new section
390.4)

committing an offence for the benefit of, or at the direction
of, a criminal organisation (new section 390.5)
and

directing the activities of a criminal organisation
(new section 390.6)

According to the Attorney-General:

The bill includes new organised crime offences
that target persons who associate with those involved in organised
criminal activity, and those who support, commit crimes for, or
direct the activities of, a criminal organisation.

The investigation of these serious criminal
offences will be supported by amendments to enable greater access
to telecommunications given that the nature of these associations
is that communication within organisation will be a very important
and significant aspect of the criminal association. [47]

Key definitions for the new Part are set out in new
section 390.1. The Senate Legal and Constitutional
Legislation Committee Report gives a neat summary of some of the
expressions as follows:

2.9 The term constitutionally covered offence
would include Commonwealth offences, state offences that have a
federal aspect, territory offences and foreign offences that are
constituted by conduct that would constitute an Australian offence,
if it occurred in Australia. State offences that have a federal
aspect would be defined by proposed section 390.2 and essentially
means state offences that involve Commonwealth matters such as
telecommunications, postal services or trade and commerce.[48]

Associate means meet or communicate (by electronic communication
or otherwise). In its comments on the association offence,
(new section 390.3) the Law Council of Australia
(raised concerns that in their the day to day operations the police
will overlook the finer details of the provision in determining
when and how they exercise their powers. The Law Council goes
on:

These concerns are confirmed by the proposed
amendments to the Telecommunications (Interception and Access)
Act (the TIA Act) contained in item 4, schedule 4 of the Bill.
The proposed amendments will ensure that law enforcement agencies
have access to interception powers under the TIA Act when
investigating the new association and criminal organisation
offences, notwithstanding that those offences carry penalties below
the threshold ordinarily required to obtain a telephone
interception warrant. [49]

In brief, under new subsection 390.3(1) an
offence will be committed if a person associates on 2 or more
occasions with another person and this other person engages, or
proposes to engage in conduct that constitutes, or in part
constitutes, an offence which attracts a penalty of imprisonment
from 3 years to life. The association must facilitate the conduct,
and the offence must involve 2 or more persons. New
subsection 390.3(2) is in similar terms, and applies to a
person who has previously been convicted of an offence under the
previous subsection. Both offences attract a maximum 3 year
penalty. According to the Explanatory Memorandum:[50]

The rationale for the repeat offence lies in
the fact that if a person has already been convicted of the
association offence in subsection 390.3(1), any further association
(even if it is only once), warrants criminal sanction.

Apart from concerns that the Law Council had about even the need
at all for the provision (see further below), it had 2 major
objections to the provision. The Law Council points out that it is
not necessary that the person charged with the offence knows or
intends that his or her association with the second person will
facilitate the commission of the offence, it is sufficient that he
or she is reckless about that possible outcome. This is because the
proposed provisions do not provide a default fault element, which
means that recklessness will apply. Recklessness , under section
5.4(1) of the Criminal Code, with respect to a circumstance,
requires proof that the person is aware of a substantial risk that
the circumstance exists or will exist and having regard to the
circumstances that are known to him or her, it is unjustifiable to
take the risk.

The Law Council submitted that the proposed provisions are based
on the flawed association with terrorists organisations provision
of the Code (section 102.8) and offences of this type unduly burden
freedom of association and are likely to have a disproportionably
harsh effect on certain sections of the population who, simply
because of their familial or community connections, may be exposed
to the risk of criminal sanction .[51] In essence the Law Council states
that persons who do not actually themselves plan, assist or
participate in the commission of an offence, should not have to
live in the shadow of offence provisions as these .[52] As the Law Council
states:

In short, the Law Council s concern is that
because this provision is focused on a person s associations, the
provision potentially affords law enforcement agencies very wide
latitude to intrude on people s privacy and liberty, based purely
on who they know and interact with, rather than on their conduct.
[53]

The Senate Legal and Constitutional Affairs Legislation
Committee addressed this matter, and have recommended that this
provision be amended by limiting its application to circumstances
where the accused intended that the association
would facilitate the criminal conduct or proposed criminal conduct
.[54]

The Law Council also had objection to the undefined expression
facilitate used in proposed subparagraphs
390.3(1)(C) and 390.3(2)(do), where the
associations must facilitate the other person engaging in the
crime. In response to questions on the broadness of this
expression, the Department responded to Senators as follows:

Again, many terms that are used are not
defined. It is not a term of art but an ordinary term that a court
would interpret. We do not thing it is too broad. The clear
connotation of facilitate is that it has to assist or support in
some way, It is not clear to me why the Law Council thinks that
facilitate is a term of uncertainty or great breadth .[55]

In Additional Comments by the Liberal Senators on the Senate
Committee, Senators Barnett and Fisher have picked up the Law
Council s comments and recommend that the Bill be amended to define
the term facilitate to ensure that it does not capture activities
that are only of peripheral relevance to the commission of an
offence.[56]

In relation to the defences provided in new subsection
390.6 the Senate Committee also proposes amendments to
ensure there is a general defence that the association was
reasonable in the circumstances, and to replace the existing
proposed defences for legal practitioners to a more general defence
that the association was only for providing legal advice or
representation.[57]. The Law Council noted in its submission[58] that the way the
defences are currently drafted the legal practitioner bears the
evidentiary burden and this will be difficult in situations where
the client does not waive legal professional immunity (privileged
communications). The Department, in the additional answers to
questions to the Senate Committee, refute this claim saying:

Accordingly, any refusal by a client to waive
legal professional privilege would not prevent a defendant [the
legal practitioner] from adducing evidence of a general nature
about the existence of such a relationship between the practitioner
and client and the general purpose for which the advice was
provided. [59]

The offence of providing support to a criminal organisation in
new subsection 390.4 entails, amongst other
things, a person to provide material support or resources to an
organisation or member and this aids or there is a risk it will aid
the organisation to commit an offence. It carries a penalty of 5
years imprisonment. New subsection 390.4(3)
provides that a conviction can be made even if the provision of
support or resources does not actually aid the organisation. Again
there is no requirement for intention to aid the organisation
(although there must be an intention to provide the support or
resources). Accordingly, the Senate Committee has recommended that
the proposed provision be amended to provide, in
newparagraph 309.4(1)(b) the
person intended the provision of the support or
resources would aid the organisation to engage in conduct
constituting an offence against any law (Recommendation 3,
paragraph 7.15). This would address concerns of the Law
Council, and other submitters. This issue was addressed in the
written questions and answers to the Department with the Department
maintaining that adding intention to this part of the offence would
significantly restrict the application of the offence .[60]

The other issue with this particular subsection is that the
maximum penalty for the offence will be 5 years imprisonment, but
the purported offence that is being assisted need only carry a
penalty of 12 months imprisonment. The Law Council submitted that
if the provision is to be introduced it should be limited to
assisting only activity which assists very serious offences being
committed.[61] The
Senate Committee does address this matter in Recommendation
4, paragraph 7.16 by recommending that the penalty for
this provision should be the maximum penalty for the offence the
accused intended to support. This is slightly different from the
Law Council s submission in that the Government could simply in
response reduce the penalty to 12 months. However, the Department s
view to this is that the matter turns on the elements which define
criminal organisation :

That is, the organisation must consist of two
or more persons and its aims or activities must include
facilitating engagement in, or engaging in, the commission of
serious criminal offences (carrying maximum penalties of three
years or above) for the benefit of the organisation. The defendant
must be reckless as to the circumstance that, for example in
relation to the supporting offence, the organisation to which they
are providing support or resources, is a criminal organisation.
[62]

This Departmental response is drawing from new
paragraphs 309.4(1)(d) and (e) which refer to the aims or
activities of the organisation which would attract an offence of 3
years or more, which is different from the conduct that is being
supported by the alleged offender, namely conduct which could
attract an offence of only 12 months. That is, the response does
not clearly address the concerns of the Law Council, or the Senate
Committee, and hence the recommendation to amend.

The Law Council in its written submission made the fundamental
argument in its general comments that the existing provisions of
the Criminal Code already adequately enable the investigation and
prosecution of those who engage in, assist, plan or commission
substantive criminal offences. The Law Council specifically refers
to provisions in the Code dealing with attempt, complicity and
common purpose, innocent agency , incitement, and
conspiracy.[63] In
addition there are provisions which already deal offences such as
possession, transfer or receipt of property or funds. Summing up
its concerns, the Law Council states:

If every time law enforcement agencies feel
impotent in the face of a particular type of offending, we amend
not just the content of our laws but the manner in which we
apportion criminal responsibility and adjudicate guilt, then the
integrity of our criminal justice system will quickly be
compromised[64]

The Liberal Senators in their Additional Comments also drew
attention to this comment and noted that they intend to closely
monitor through the Estimates process whether these powers are
being exercised appropriately. [65] This suggests that they will not be opposed in
the Senate.

The Committee notes the Government s response to the argument of
the Law Council, by referring to the Acting Deputy Commissioner of
the AFP, Mr Quaedvlieg s evidence given on the day of hearings,
where he said that the offences were specialised offences:

designed to combat organised crime that is not
fully covered by the current existing criminal responsibility
provisions such as conspiracy, complicity, and association.
[66]

In addition, Mr Quaedvlieg also said in response to a question
at the hearings:

It [the Bill] will give us an extended suite of
powers. The existing provisions that we use to target members have
been effective in the past but, with the increasing sophistication,
internationalisation and fluidity of organised crime groups, these
extended powers give us that little bit more reach where we can
actually hit the upper echelons, and that is where our focus
is.[67]

In his closing comments in the House of Representatives at the
third reading stage of the Bill the Attorney-General summed up the
safeguards of the association and criminal organisation
offences;

Firstly, with respect to the association and
criminal organisation offences, the offences articulate clear
boundaries of criminal by requiring proof by the prosecution of
certain specific elements. The offences require proof that the
offender was aware of a substantial risk that their conduct would
facilitate serious and organised crime. The offences criminalise
varying levels of involvement in a criminal organisation and carry
penalties reflecting the spectrum of seriousness, from supporting
conduct to more serious conduct of directing the affairs of the
organisations. Defences will also apply to ensure legitimate
associations are protected. [68]

There has been little public comment on this second Bill,
reflected perhaps in that major comments were made on the first
serious and organised crime bill and the amount of time allowed to
consider this Bill. As the Liberal Senators noted in their
Additional Comments:

There is only one schedule in the Bill which
contains urgent amendments [schedule 6 Unfitness to Plead]. It is
unclear to Liberal Senators why these amendments could not have
been dealt with separately to enable more thorough consideration of
a Bill which introduces major new offences and powers. [69]

Part 1 of Schedule 5 contains proposed amendments to Division
400 of the Criminal Code Act, which aim to address impediments to
the investigation and prosecution of money laundering offences set
out in Division 400, which were identified by the AFP and DPP.

Part 2 of Schedule 5 contains proposed amendments to the
Anti-Money Laundering and Counter Terrorism Financing Act
2006 (the AML/CTF Act), which aim to improve both the
operation of the AML/CTF Act and AUSTRAC s ability to enforce
obligations of reporting entities under the AML/CTF Act.[70]

Items 1 and 3 propose to amend
the definitions of instrument of crime and proceeds of
crime , respectively, in subsection 400.1(1)
of the Criminal Code Act by clarifying that the money laundering
offences in Division 400 would apply to all indictable
offences, not just Commonwealth offences. In other words, this
would include State, Territory and foreign indictable
offences.[71]

Item 2 proposes to further amend the definition
of proceeds of crime in subsection 400.1(1) by
including money or other property that is wholly or partly derived
or realised from the commission of a Commonwealth, State, Territory
or foreign indictable offence (even those that may be summarily
dealt with in certain circumstances).

Item 4 proposes to substitute the meaning of
deals with money or other property in section
400.2 and inserts new section 400.2A into
the Act.

New section 400.2 provides that a person deals
with money or other property if he or she:

receives, possesses, conceals or disposes of money or other
property

imports or exports money or other property into or from
Australia, or

engages in a banking transaction relating to money or other
property .[72]

New section 400.2A provides that sections 400.3
400.8 would only apply in certain circumstances where a person
deals with money or property that:

is intended by the person to become an instrument of crime,
or

is at risk of becoming an instrument of crime.

Such circumstances are as follows:

where such money or other property is intended to become, or is
at risk of becoming, an instrument of crime relating to:

a Commonwealth, Territory or foreign indictable offence,
or

a State indictable offence with a federal aspect, or

where the dealing with such money or other property occurs:

in the course of or for purposes of importing goods into
Australia or exporting goods from Australia

by means of a postal, telegraphic, telephonic or such service
under paragraph 51(v) of the Constitution

in the course of banking (other than intra-State banking),
or

outside Australia.

Note that new subsection
400.2A(5) provides that absolute liability would apply to
new subsections 400.2A(3) and
(4), which set out the above mentioned
circumstances. This effectively means that it would not be
necessary to prove a fault element and nor would the defence of
mistake be available.

It is stated in the Explanatory Memorandum
that:

these subsections are both jurisdictional
elements A jurisdictional element of an offence is an element that
does not relate to the substance of the offence, but marks a
jurisdictional boundary between matters that fall within the
legislative power of the Commonwealth and those that do not.
Absolute liability is appropriate and required for these elements
of the offences. This is consistent with Commonwealth criminal law
policy, as described in the Guide to Framing Commonwealth
Offences, Civil Penalties and Enforcement Powers, and
consistent with the approach taken in other offences in the
Criminal Code.[73]

Items 5 15 propose amendments
in the Criminal Code Act that are consequential to item
4.

New subsection 400.9(1)
provides that a person commits an offence if he or she:

deals with money or other property (see item
4)

it is reasonable to suspect that the money or property
constitutes proceeds of crime (see items 2 and
3), and

the value of the money and other property is $100 000 or more
at the time of dealing.

The penalty for this offence would be three years
imprisonment and/or 180 penalty units.[74]

It is stated in the Explanatory Memorandum
that:

A penalty of 3 years for the possession of
money or property reasonably suspected of being the proceeds of
crime worth more than $100,000 reflects the serious nature of
possessing the proceeds of crime worth more that $100,000 and the
significant criminal activity that has generated $100,000 or
more.[75]

New subsection 400.9(1A) is a
similar offence provision applying where the value of the money and
other property being less than $100 000 at the time of dealing. The
penalty for this offence would be two years imprisonment and/or 120
penalty units, presumably reflecting the lesser degree of
seriousness of the offence.[76]

Items 17 and 20 propose
amendments essentially consequential to item 16.
However, note that under item 20, absolute
liability would apply to new paragraphs
400.9(1)(b) and (c), as well as
new paragraphs 400.9(1A)(b) and
(c). It is stated in the Explanatory Memorandum
that:

This is consistent with the application of
absolute liability to these elements in the current
money-laundering offences.

As paragraph (b) establishes an objective
standard of fault, being reasonable to suspect , it is appropriate
to apply absolute liability to ensure that subjective fault
elements, such as knowledge or recklessness, do not apply.

It is also appropriate to apply absolute
liability to paragraph (c), as this element does not relate to the
substance of the offence but merely specifies the monetary
threshold for the application of the offence.[77]

Item 18 proposes to amend paragraph
400.9(2)(c) of the Criminal Code Act to include a
timeframe within which the value of money or other property, that
is grossly out of proportion to the defendant s income and
expenditure, would be considered. In other words, the proposed
amendment:

will ensure that consideration is given to the
defendant s income and expenditure over a reasonable period within
which the conduct occurs.[78]

Similarly, item 22 proposes to amend
subsection 400.10(1) of the Criminal Code Act,
consequential to amendments proposed in item 16
(see above). This means that, in addition to offences under
sections 400.3 400.7, a person would not be criminally responsible
for a section 400.9 offence, as proposed in the Bill, where that
person:

was under a mistaken but reasonable belief as to the value of
the money or property at or before the time of dealing with that
money or property, and

if the value had been what the person believed it to be the
person s conduct would have constituted another Division 400
offence and the maximum penalty units would be less than the
maximum penalty units for the actual offence charged.

Item 23 proposes to substitute section
400.15 in the Criminal Code Act, extending the
geographical jurisdiction for money laundering offences under
Division 400 of the Act. The geographical jurisdiction is being
amended to be Category B, as set out in section 15.2 of the
Criminal Code. This means that the provisions will apply to conduct
that occurs wholly or partly in Australia, to Australian citizens,
Australian bodies corporate and Australian residents for what they
do anywhere in the world. It will cover conduct that has a result
in Australia. If the conduct occurs wholly in a foreign country,
and the offender is not an Australian citizen or an Australian body
corporate, there is a defence based on the law of the foreign
country. Extending the geographical jurisdiction will increase the
prospects of more investigations and successful prosecutions under
this section.

Item 25 proposes to insert new definition of
non-financier into section 5 of the AML/CTF Act. Non-financier
would mean a person who is not:

an ADI

a bank

a building society

a credit union, or

a person specified in the AML/CTF Rules.

Item 26 proposes to amend the definition of
stored value card in section 5 of the AML/CTF Act.
Stored value card would not include a debit or credit card but
would include any other portable device capable of:

storing monetary value in a non-physical currency form, or

being used to access monetary value stored in such form.

It would also include a portable device (other than a debit or
credit card) of a kind prescribed by regulations.

According to the Explanatory Memorandum, item
26 would:

ensure that stored value cards that do not
store the monetary value on the card itself are capable of being a
stored value card for the purposes of the AML/CTF Act.[80]

It should be noted that this definition differs from the
definition stored value card being inserted into the Criminal Code,
section 338, by item 148, Schedule 1, Part 4 of
this Bill.

Item 28
proposes to substitute table items 31 and
32 in subsection 6(2) Table 1 in
the AML/CTF Act. Table 1 relates to designated services in
financial services for the purposes of this Act.

New table items
31 and 32 would limit the provision of
designated services, which relate to designated remittance
arrangements, to non-financiers (as defined in item
25 above) carrying on businesses that give effect to such
arrangements. The proposed amendment means that an ADI, bank
building society, credit union or person specified in the AML/CTF
Rules would not provide the designated services in new
table items 31 and 32. In addition, as
stated in the Explanatory Memorandum, a non-financier would only be
able to provide such designated services in the course of carrying
on a business of giving effect to remittance arrangements.[81]

Lastly, as pointed out in
the Explanatory Memorandum:

Providers of remittance services that use the
financial system to accept or make money or property available for
customers appear to have been inadvertently excluded from both the
definition of designated remittance arrangement and the related
designated services at items 31 and 32.

This amendment will address this issue and
implement the original policy intention by ensuring that remittance
dealers who accept money from a customer, and make money available
to a customer, through the financial system are providing
designated services at items 31 and 32.[82]

New paragraph
10(1)(a) provides that a reference to a designated
remittance arrangement in the AML/CTF Act includes a reference to a
remittance arrangement where at least one of the following people
is a non-financier:

someone accepting an instruction from the transferor entity to
transfer money or property under the remittance arrangement,
or

someone making money or property available, or arranging for
this to happen, to an ultimate transferor entity as a result of a
transfer under the remittance arrangement.

There are two aspects to
these proposed amendments. First, as stated in the Explanatory
Memorandum:

AUSTRAC has experienced difficulties relating
to the taking of enforcement action against providers of designated
remittance services in response to non-compliance with obligations
under the AML/CTF Act. It is difficult to prove that the entity
located in a foreign country is not an ADI, a bank, a credit union,
a building society or a person specified in the AML/CTF Rules to
satisfy the definition in section 10.

This amendment will remove the requirement to
prove that the entity located in a foreign country is not an ADI, a
bank, a building society, a credit union or a person specified in
the AML/CTF Rules, when proving the existence of a designated
remittance arrangement.[83]

arrangements where someone receives and accepts an instruction
from a transferor entity for the transfer of money or property
under a remittance arrangement, and

people making money or property available, or arranging for it
to be made available, to ultimate transfer entities as a result of
transfers under remittance arrangements.

Item 32 is
consequential to items 28 and 30,
proposing to amend the definition of the transferor entity in
paragraph 10(3)(a) of the AML/CTF Act, which would
capture arrangements where instruction is accepted from a
transferor entity for the transfer of money or property under a
designated remittance arrangement.

Item 33 is
also consequential to items 28 and
30, proposing to amend table items
3 and 4 in section 46 of
the AML/CTF Act by substituting non-financier in Australia for
person in Australia . This means that an ADI, bank, building
society, credit union or person specified in the AML/CTF Rules
would not fall within the meaning of international funds transfer
instruction and would not have the requisite reporting
obligations.

Item 34
proposes to amend subsection 59(1) of the AML/CTF
Act, by specifying that anyone who must provide a report about
bearer negotiable instruments (BNIs) to AUSTRAC, a customs officer
or police officer, must do so immediately rather than as soon as
possible.

According to the
Explanatory Memorandum:

This amendment will address problems
encountered by AUSTRAC, Customs and the AFP when issuing an
infringement notice for the failure to provide a report about the
movement of a BNI. The requirement to report a BNI as soon as
possible has created uncertainty over when a report must be
provided.

This amendment will provide greater certainty
over when a report must be provided and ensure consistency with the
timing of the requirement to report the movement of physical
currency.[84]

prohibits a reporting entity that has given
information or produced a document to a person under subsection
49(1) from disclosing to anyone else that the information or
document was provided.

However, this prohibition only operates if the
reporting entity gives information or produces a document. The
prohibition does not exist prior to the giving of information or
production of a document and section 123 does not prohibit a
reporting entity from disclosing to another person that it has
received a request for information.[85]

Schedule 6 makes a minor amendment to the
Crimes Act 1914 which the Minister states is urgent and
its purpose is to preserve the ability of a person who has been
charged with a Commonwealth offence and who is being tried in
Victoria for a Commonwealth offence, to appeal a finding that they
are unfit to plead .[86]

In Victoria, the yet-to-be proclaimed Criminal Procedure Act
2009 (Vic) will repeal section 570C of the Crimes Act
1958 (Vic) which currently provides a right to appeal to the
Court of Appeal when a jury has made a finding that a person is
unfit to stand for trial. This section applies to federal
defendants by the operation of the Judiciary Act 1903
which applies State and Territory procedural and other laws to
people who have been charged with a Commonwealth offence. Due to
changes in Victorian mental health laws, section 570C has become
obsolete and hence it s proposed repeal.[87]

According to the Explanatory Memorandum therefore:

The Commonwealth Crimes Act does not provide
federal defendants with a right of appeal equivalent to that in
current section 570C of the Victorian Crimes Act. As a result,
although that section is no longer required for people accused of
offences against Victorian law, it retains relevance for federal
offenders. If the appeal mechanism provided by section 570C is not
maintained in some form, a federal defendant in Victoria would not
be able to appeal a finding that he or she is unfit to plead

Accordingly, this Schedule amends Division 6 of
Part 1B of the Commonwealth Crimes Act to provide federal
defendants with the ability to appeal a finding that they are unfit
to plead, in a manner that reflects current section 570C of the
Victorian Crimes Act.

The Explanatory Memorandum asserts that section 570C was
repealed with effect from October 2009 , by the Criminal Procedure
Act (Vic). Note this Schedule will commence once the Victorian Act
is proclaimed.

Item 1 adds new section 20BI
the Commonwealth Crimes Act to insert a right of appeal to the
Court of Appeal of Victoria from a jury finding that an accused is
unfit to stand trial. It refers to federal offences alone.
Items 2 and 3 apply the new
provision to findings made before, on or after the commencement of
the provision, and make transitional provision for proceedings that
have not been completed prior to the repeal of section 570C, if
any.

Items 4 and 6 amend the
Australian Crime Commission Act 2002 (the ACC Act) to
repeal and substitute the definition of intelligence operation to
include the notion that an operation may involve the investigation
of matters relating to criminal activity. According to the
Explanatory Memorandum:

this amendment will recognise that a specific
investigation can be part of an intelligence operation and will
allow the ACC to undertake actions which may otherwise be reserved
for an investigation . For example, a search warrant under section
3E of the Crimes Act can only be obtained for the investigation of
an offence. A search warrant cannot be obtained under the Crimes
Act for an intelligence operation of intelligence gathering in
general. This amendment will mean that while conducting an
intelligence operation, the ACC will be able to obtain a search
warrant under the Crimes Act if it is conducting an investigation
into an offence which is a necessary part of the operation.
[88]

Item 7 amends subsection 7B(2) to include the
Commissioner of Taxation on the ACC Board to provide the expertise
of the Commissioner to the Board. This amendment has been
recommended in four separate Parliamentary Joint Committee-ACC
reports.[89]

Under the ACC Act, examiners are given powers to issue summons
for persons to appear to give evidence and to produce documents or
other things as outlined in the summons. When issuing summons,
examiners must be satisfied that it is reasonable to do so and are
required to record reasons for issuing the summons or notice to
appear or provide documents. Currently an examiner can record
reasons before, at the same time or as soon as practicable after
issuing a summons or notice (subsections 28(1A) and 29(1A)). As a
result of recommendations of the Parliamentary Joint Committee,
these provisions are being amended to ensure that an examiner
provides reasons at or before the time a summons or notice is
issued (items 10 and 13). This
addresses the concern of the use of coercive powers being properly
accounted for and recorded. The Parliamentary Joint Committee also
recommended that the provisions that stated that a summons or
notice was valid despite a failure to record reasons should be
repealed.[90]

Item 18 inserts new sections 34A to
34F to strengthen the powers of the ACC in relation to
contempt. These amendments are to deal with the problem the ACC has
been having with uncooperative witnesses who appear before
examiners and either fail or refuse to take the oath or
affirmation, or refuse to answer questions or produce documents.
The current procedure requires the ACC to issue summons and require
the person to appear before a court to have the matter dealt with.
This process can be time-consuming and cumbersome according to the
evidence of the ACC.[91]

There are several aspects of the proposed amendments that have
brought criticism. These are in relation to legal professional
privilege, and the power to detain pending appearing before a
court.

New paragraphs 34A(b), (c), (d), (e) and (f)
extend the coercive powers over legal practitioners who appear
before the ACC and who refuse to provide the name and address of a
client when an answer to a question or a document would reveal a
privileged communication, who give false or misleading material to
an examiner, who obstruct or hinder an examiner, who disrupt an
examination or who threaten a person present at an examination. The
Explanatory Memorandum is silent on the rationale to make specific
provision in relation to legal practitioners. In evidence before
the Senate Legal and Constitutional Legislation Committee any
evidence of problems with lawyers conduct was only briefly alluded
to. In response to a question as to whether claiming privilege was
a lawyers tactic to evade the intention of the legislation, Mr
Lawler replied:[92]

I do not think there is any doubt about that.
Whether it is by the lawyers or acting on instructions on behalf of
their clients there is no doubt in my mind that this is a
coordinated attempt to frustrate the system

The evidence given to the Committee was that the provision did
not override legal professional privilege, and only requires the
lawyer to provide the name and address of the client so that the
ACC can make independent inquiries as to whether the client wishes
to claim the privilege, or waive it.[93] The Law Council does not take issue
with the provision applying to practitioners although it does have
other problems with the proposed provisions, mentioned below. The
Attorney-General and Minister for Corrective Services, WA, does
raise the concern that new section 34A appears to
prevail over legal professional privilege and, in principle, he did
not support it.[94]

The Law Council submitted that new paragraphs 34A(d),
(e) and (f) (obstruction, disruption and
threats) were not necessary and should not be made. This is because
there are already sufficient offence provisions dealing with these
types of contempts under the ACC Act.[95]

A significant objection was made by the Law Council to the
procedure adopted in the Bill as to how contempt was to be dealt
with. Under the Bill if an examiner is of the opinion a person is
in contempt the examiner may apply to a court to deal with the
contempt (new subsection 34B(1)). If the court
finds that the person was in contempt of the ACC, the court may
deal with the person as if the acts or omissions involved
constituted a contempt of that court (new subsection
34B(5)). The Law Council of Australia prefers a process
recommended by the Australian Law Reform Commission that where an
inquiry body, such as the ACC, gives a notice or direction that a
person fails to comply with, then the matter should be referred to
a court for a court to enforce the notice or direction. It is only
then that if the person still fails to comply that this refusal
will become a contempt to be dealt with by the court. The subtle
difference being proposed by the Law Council of Australia deals
with the perceived mischief of the misuse of the law of
contempt.

the law of contempt was developed to protect
the administration of justice. Therefore, it should only be
employed to safeguard and reinforce the authority of the court, and
not executive bodies exercising executive powers such as the ACC.
[96]

The application to the court by the examiner must be accompanied
by a certificate stating the grounds for making the application,
and the evidence in support of the application (new
subsection 34B(3)). New subsection 34C(3)
goes on to provide that this certificate is prima facie evidence of
the matters specified in the certificate. The Law Council of
Australia objects to the subsection and submits it should not be
enacted on the basis also of ALRC recommendations that the power to
determine the facts should be exercised independently of the
inquiring body such as the ACC. That is, that this should be left
to the court.

New section 34D gives the examiner the power to
direct a constable[97] to detain an alleged offender for the purposes of
bringing the person before the court. The Law Council of Australia
objects to this proposed provision on two grounds, namely that
persons such as the examiners who are not judicial officers should
not be given such a power for any purpose or period, and because if
a person has appeared voluntarily before the examiner in compliance
with a summons he or she will also volunteer to respond to a court
summons to appear.[98] The Law Council recommends that new section
34D not be enacted at all. The WA Attorney-General also
had objection to this provision, not on separation of powers
grounds, but in its application to legal practitioners:

In my view, unless there are compelling
empirical statistics and examples to support the need for such
deterrence, this aspect ought, at least, be amended to provide for
contempt applications to be dealt with expeditiously by the courts
rather that immediate detention at the behest of the
examiner.[99]

Departmental officers before the Legal and Constitutional
Legislation Committee advised the Committee that the Department is
confident that the contempt provisions are constitutional, as are
the rest of the provisions.[100] In its response to questions on notice, the
Department advised that it received legal advice from the
Australian Government Solicitor on 6 April 2009, and that the
Attorney-General wished to claim immunity over the disclosure of
that advice.[101]

In the response to questions on notice the Department has
indicated that it may consider a Government amendment to proposed
section 34D to clarify that the examiner makes the application to
the court as soon as practicable when a person is detained, rather
than the ACC making the application.[102]

Item 21 adds new subsections
35(2) and (3) to have the effect that if
a person is dealt with for contempt under the ACC Act then he or
she cannot be prosecuted for the conduct (act or omission), but if
a person is prosecuted for an offence in relation to an act or
omission then he or she cannot be dealt with under the ACC Act for
the contempt. As an examiner can choose which path to follow in
dealing with the contempt, these provisions ensure that once one
path is followed, the other is ruled out, thus complying with the
double jeopardy rule.[103]

Items 3 and 6 increase the
penalties for the offences of bribing a foreign public official
(section 70.2 of the Criminal Code Act), and bribery of a
Commonwealth public official (section 141.1 of the Criminal Code
Act) respectively. Currently both offences carry a penalty of 10
years imprisonment. Under section 4B of the Crimes Act
1914, the courts can impose a pecuniary penalty as well, and
in relation to these offences, the amount is $66 000 for an
individual, and $330 000 for a corporation.[104]

The amendments will mean that the penalty for an individual will
be a maximum of 10 years imprisonment, a fine of $1 100 000 or
both. The Explanatory Memorandum sets out the penalty for a
corporation as follows:[105]

100 000 penalty units ($11 000 000)

Three times the value of any benefit that was directly or
indirectly obtained and that is reasonably attributable to the
conduct constituting the offence (including any body corporate
related to the body corporate)

If the court cannot determine the value of the benefit, then 10
per cent of the annual turnover of the body corporate during the 12
months ending at the end of the month in which the conduct
constituting the offence occurred.

The rationale for the amendments is that a review by the
Organisation for Economic Cooperation and Development considered
that the penalties were not effective, proportionate and dissuasive
as required the relevant international Convention governing bribery
of foreign public officials.[106]

The definition of import in section 300.2 of
the Criminal Code is repealed and replaced in this amendment.
Currently import is merely defined as includes bring into Australia
and it is being expanded as follows:

Import, in relation to a substance,
means import the substance into Australia and includes;

bring the substance into Australia, and

deal with the substance in connection with its
importation.

According to the Explanatory Memorandum:

The effect of this amendment is that the
Commonwealth drug importation offences will capture criminal
activity related to the bringing of drugs into Australia
and subsequent criminal activity connected with the
importation of drugs.[107]

The amendment expands the operation of importation from when
goods first arrive in Australia, to a process that extends before
and beyond the time of arrival in Australia.

These amendments are consequential to the enactment of the joint
commission offence which is proposed by Part 1 of Schedule 4 to the
Crimes Legislation Amendment (Serious and Organised Crime) Bill
2009. Thus, if that Bill is not enacted, this Schedule will not
operate.

The consequential amendments are made to the following existing
Acts and will insert 11.2A into the relevant offence
provisions:

Concluding comments

The amendments proposed in the Bill, along with the considerable
Crimes Legislation Amendment (Serious and Organised Crime) Bill
2009, have been dealt with quickly by Parliament considering the
complexity and some concerns expressed, particularly by the Law
Council. This haste seems unwarranted given that, as noted by
Liberal Senators, only Schedule 6, relating to unfitness to plead
is considered urgent by the Government.

Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2430.

[19]. The Scrutiny of Bills Committee has sought the
Attorney-General s advice for reasons for the retrospective
provisions in the Bill Alert Digest 13/09, pp. 22-23. From a
practical perspective it is difficult to see how the proceeds of
crime laws could operate retrospectively because they relate to a
person s property in possession at the time of the
application.

[49]. Law Council of Australia, Submission to the
Senate Legal and Constitutional Affairs Legislation Inquiry into
the Crimes Legislation Amendment (Serious and Organised Crime) Bill
(No.2), October 2009, p. 11.

[70]. As to the meaning of reporting entity , see in
particular Anti-Money Laundering and Counter Terrorism
Financing Act 2006 section 5 (definition) and Part 3
(reporting obligations).

[71]. As to the meanings of State, Territory and
foreign indictable offence, see Criminal Code Act1995 subsection 400.1(1).

[72]. Note that property export money or other
property from Australia, import money or other property into
Australia, and banking transaction are defined in subsection
400.1(1) of the Criminal Code Act.

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